Car manufacturers in the race for a connected future

Four in 10 drivers are unaware that connectivity features exist in their vehicles, new research shows

Car manufacturers at risk of being left behind by Google, Uber, Apple and other tech companies

Audi, BMW and Mercedes identified as most successful in offering simple and easy-to-use connected features

Ford most successful among volume brands surveyed

London, May 24, 2016 – Eight in 10 new cars will be connected by 2020, yet consumers are still in the dark about the benefits of car connectivity with four in 10 drivers (39%) unaware that these features exist in their own vehicles, according to new research from TNS and the BearingPoint Institute.

The survey of 3,700 connected car owners in Europe shows there is clear excitement about connected cars, in particular navigation, driver assistance and in-car entertainment, with almost six in 10 respondents (59%) saying that connected features influenced their choice of vehicle and 32% saying it was an important criteria at purchase.

Despite this, OEMs are struggling to use connectivity features to open new revenue streams, build stronger relationships with customers and boost brand awareness. This is leaving the door open for companies like Uber and Apple, which are already investing in infotainment and geo-location functions, to steal market share in this area.

Car manufacturers need to act fast if they are to avoid being overtaken by the big tech players. Smartphones are already integrating entertainment and navigation functionality with existing on-board systems, such as Apple’s Car Play and the Google powered Open Automotive Alliance. Smartphone apps can help drivers find their cars if they’ve forgotten where they parked, unlock them remotely and even prepare the interior temperature long before the driver arrives.

OEMs therefore need to find ways to either partner with tech companies or invest in them as Audi, BMW and Mercedes have recently done with their $3 billion purchase of the Nokia/Microsoft HERE map and navigation platform to make their features even better than the software specialists’ products.

Remy Pothet, Global Automotive Sector Head at TNS

The study also highlighted the importance of ‘on-boarding’ customers during the sales process, with 48% of drivers who use connected features saying that the technology was demonstrated to them in the showroom, which is why test drives are growing in importance. Explaining and showing the technical capabilities of the car early in the sales process is critical to the uptake and use of connectivity.

OEMs also need better training for dealership staff to demonstrate the benefits of connectivity. Customers often complained that dealership staff didn’t know enough about how the connected features worked, with many buyers saying they knew almost as much themselves.

Connected cars are the beginning of a new era in automotive. OEMs are moving from a primarily B2B to a B2C model where they have the opportunity to build direct relationships with their customers. Even what they sell is changing: from selling physical products, they are now selling a platform of digital services. Our study shows that the German premium OEMs are so far leading the way in terms of the quality and useability of their features. To really exploit this new era, all OEMs need to invest to ensure customers are aware of and are enjoying these connected features.

Sarah-Jayne Williams, Partner at BearingPoint

About the research
This release is based on research carried out by TNS between 24 July and 9 September 2015. We surveyed 3,724 individuals who had purchased a new or used car in the preceding 18 months. Respondents were smartphone users who had bought a car with connected car features, but who were not necessarily using those features. Owners of 11 car brands were used in the study.

Respondents were given the following definition of ‘connected features’: ‘The various options available for a car to make a connection with the internet and/or a smartphone. The data the car collects can pass on technical information (e.g. driving behaviour, maintenance, failures); indicate where the car is located (e.g. navigation, emergency calls, parking); and give access to information, entertainment and contacts (including apps).’

Respondents were based in the UK, Spain, France, Germany, the Netherlands, Italy and the Nordics (Sweden, Denmark, Finland and Norway). The results were weighted by country and car brand.

About TNS
TNS advises clients on specific growth strategies around new market entry, innovation, brand switching and customer strategies, based on long-established expertise and market-leading solutions. With a presence in over 80 countries, TNS has more conversations with the world’s consumers than anyone else and understands individual human behaviours and attitudes across every cultural, economic and political region of the world.

TNS is part of Kantar, the data investment management division of WPP and one of the world's largest insight, information and consultancy groups. Please visit www.tnsglobal.com for more information.

About TNS Automotive
We are a team of over 800 Automotive experts around the world on a mission to help our clients make better decisions. We offer a unique breadth of experience – from innovation to customer relationships and tapping into future trends.

We believe in the power of simplicity to create powerful opportunities in the complex Automotive marketplace. For more information please visit www.tnsglobal.com/automotive.

About Kantar
Kantar is the data investment management arm of WPP and one of the world's largest insight, information and consultancy groups. By uniting the diverse talents of its 12 specialist companies, the group is the pre-eminent provider of compelling data and inspirational insights for the global business community. Its 30,000 employees work across 100 countries and across the whole spectrum of research and consultancy disciplines, enabling the group to offer clients business insights at every point of the consumer cycle. The group’s services are employed by over half of the Fortune Top 500 companies. For further information, please visit us at www.kantar.com.

About the BearingPoint Institute
Founded in 2009, the BearingPoint Institute is an incisive, authoritative voice on business-critical topics, bringing together the finest minds from both within and outside BearingPoint. The Institute's ambition goes beyond traditional 'thought leadership’: we aim to equip business leaders with actionable insights and advance the science of management by combining our consultant’s experience 'in the field' with research into topical business issues.

About BearingPoint
BearingPoint consultants understand that the world of business changes constantly and that the resulting complexities demand intelligent and adaptive solutions. Our clients, whether in commercial or financial industries or in government, experience real results when they work with us. We combine industry, operational and technology skills with relevant proprietary and other assets in order to tailor solutions for each client’s individual challenges. This adaptive approach is at the heart of our culture and has led to long-standing relationships with many of the world’s leading companies and organizations. Our global consulting network of 9,700 people serves clients in more than 70 countries and engages with them for measurable results and long-lasting success.